Galaxy sets aside up to $5 million for Bitcoin quantum defenses

Galaxy Digital is putting up to $5 million behind work meant to protect Bitcoin from future quantum computers. For everyday crypto holders, the issue is straightforward: if quantum machines become powerful enough, some Bitcoin wallets could become easier to steal from unless the network upgrades its defenses.

The Nasdaq-listed digital assets firm said Tuesday it has launched a Bitcoin Quantum Readiness Initiative with three parts: developer grants for post-quantum cryptography, research from Galaxy Research, and a Quantum Advisory Council made up of academic experts.

Galaxy said it expects to start accepting grant applications immediately. The first members of the advisory council include University of Calgary professor Barry Sanders, MIT Sea Grant Knauss Fellow Damien Bérubé, and Boston University computer science professor Eran Tromer.

Mike Novogratz, Galaxy’s founder and CEO, said in a statement that the company wants to help address any potential risk quantum computing may pose to Bitcoin.

What the quantum risk means

The concern centers on what researchers call “Q-Day,” the point when a quantum computer could break the elliptic curve cryptography used by Bitcoin. Cryptography is the math that lets a wallet prove it owns coins without revealing its private key, the secret code needed to spend them.

According to Galaxy, a sufficiently capable quantum computer using Shor’s algorithm could work backward from an exposed public key to find the related private key. With that private key, an attacker could create a valid-looking signature and move the coins. On the blockchain, the transaction would not automatically appear fraudulent because the signature would check out.

Older wallets and wallets that reuse addresses are considered more exposed, according to the discussion around Bitcoin quantum defenses. Possible responses include moving coins to quantum-resistant addresses and adopting new signature systems through proposals such as BIP-360 and BIP-361. BIPs, or Bitcoin Improvement Proposals, are documents used to suggest technical changes to Bitcoin.

Any major change would likely take time. Bitcoin does not have a central operator that can push an upgrade through on its own, so developers, miners, node operators and users would need to broadly agree on a path.

Industry warnings are getting louder

Galaxy’s move comes as more crypto and security groups call for earlier preparation. In a May report, quantum security firm Project Eleven said a cryptographically relevant quantum computer is more likely than not to exist by 2033, and could arrive as early as 2030. The firm estimated that about 6.9 million Bitcoin are held in addresses exposed to quantum risk.

In June, Coinbase’s quantum advisory council urged developers to begin migration work rather than focus on debating the exact timing of the threat. Coinbase’s council estimated vulnerable supply at about 7 million BTC.

Also in June, President Donald Trump signed two executive orders aimed at advancing U.S. quantum capabilities and shifting the federal deadline for post-quantum cryptography to December 2031, according to the reported order details.

Project Eleven later introduced a proposed method for users to prove wallet ownership after Q-Day by showing control of a parent key instead of relying on a standard signature. CEO Alex Pruden wrote that the approach would give users a fallback to prove ownership through derivation after the window for safe signature use closes.

Alex Thorn, head of Galaxy Research, said in a statement that quantum computing is moving quickly while Bitcoin development is only beginning to seriously address post-quantum cryptography. He said Galaxy aims to connect those fields through research for investors and policymakers and grants for developers doing the technical work.

This story draws on original reporting from Decrypt.